Smaller cigarette manufacturers sued FDA to invalidate provsion in final rule..

April 30, 2010 - Some smaller cigarette manufacturers have sued FDA (filed April 23, 2010) to invalidate a provision in FDA’s recently issued final rule that would restrict a manufacturer from using certain product names on the ground that the restriction violates the First and Fifth Amendments, among other grounds. Section 1140.16(a) of FDA’s final rule restricting the sale and distribution of cigarettes and smokeless tobacco to minors restricts a manufacturer from using the trade or brand name of a nontobacco product as the trade or brand name for a cigarette or smokeless tobacco product, unless the trade or brand name was on both a tobacco product and a nontobacco product sold in the U.S. on January 1, 1995. Products that violate the restriction are deemed misbranded.

Background: As required by the Family Smoking Prevention and Tobacco Control Act (Tobacco Control Act), Food and Drug Administration (FDA) is issuing a final rule that is identical to the provisions of the final rule on cigarettes and smokeless tobacco published by FDA in 1996, with certain required exceptions. It was felt it makes no sense to require FDA to reinvent the wheel by conducting a new multiyear rulemaking process on the same issues. Both the 1996 final rule and the 1995 proposed rule (60 FR 41314) included extensive discussions of the scientific information available at that time and the final rule included FDA's responses to the more than 700,000 comments on the proposed rule.

Passage of the Tobacco Control Act negates the Supreme Court’s 2000 ruling in FDA v. Brown & Williamson Tobacco Corp., which held that, despite the dangers inherent in tobacco use, the FDA did not have the authority to promulgate regulations relating to the use or advertising of tobacco products.

Regulations Restricting the Sale and Distribution of Cigarettes
and Smokeless Tobacco To Protect Children and Adolescents, AGENCY: Food and Drug Administration, HHS. ACTION: Final rule.

U.S. FDA publishes rule to protect our children that restrict advertising and marketing of tobacco products..

The rule takes effect June 22, 2010.

The manufacturers contend that the restriction has a disproportionate negative impact on small cigarette manufacturers because the trade or brand names used by the larger manufacturers are generally excepted by virtue of having been in use prior to 1995. As examples of the restriction’s far-reaching effects, the complaint cites (among other things) the fact that the restriction:

* applies even where the manufacturer of the nontobacco and the tobacco products are wholly unrelated;
* the nature of the products is such that there is no likelihood of confusion, mistake, or deception;
* no account is taken of whether different geographic markets are in play;
* the restriction applies regardless of which product had first use and trademark registration; and
* the rule includes no grandfather clause, such that a name used well before the rule’s effective date (but after January 1, 1995) would nonetheless be restricted.

Plaintiff’s contend that the rule would result in a loss of commercial speech, as well as a taking and destruction of property interests, in violation of the First and Fifth Amendments. Plaintiffs seek both a preliminary and permanent injunction, as well as other relief.

Small companies, such as plaintiff Renegade Tobacco, will not be able to keep selling its "Tucson" brand cigarettes, because Hyundai uses the term for cars, according to the federal complaint. But Big Tobacco companies already have cemented rights to their products, such as Marlboro and Camel, and so will not be affected.

Renegade Tobacco, Alternative Brands, and Seneca-Cayuga Tobacco say the Product Name Restriction regulation will restrict "the ability of cigarette manufacturers to engage in commercial speech using their federally registered trademarks, including brand names that have been in use for years."

References: Smaller Cigarette Manufacturers Challenge Constitutionality of FDA’s Restriction on Certain Product Names by Ricardo Carvajal, FDA Law Blog, 4/29/2010; FDA Favors Big Tobacco, Small Firms Say by RYAN ABBOTT, Courthouse News Service, 4/28/2010.